The World-System. An interdependent system of countries linked by economic and political competition...

The World-SystemThe World-System

An interdependent system of countries linked by economic and political competition

The World-SystemThe World-System

Telecommunications: Billions of MinutesTelecommunications: Billions of Minutes

““Globalization”

Globalization”

But what is Globalization?But what is Globalization?

The increasingincreasing interdependence and interconnectedness of places globally.

Elements of Globalization

• The continual The continual expansionexpansion of global of global connections, relations and networks:connections, relations and networks:

• Faster and more intenseFaster and more intense

• Increasing Increasing awarenessawareness about the world about the world

• Driven by advancing Driven by advancing technologiestechnologies

Nike: An “American” CompanyNike: An “American” Company

Nike HQ:Nike HQ:Beaverton, ORBeaverton, OR~5,000 workers~5,000 workers

But where are Nike’s actually made?But where are Nike’s actually made?

• 25,000 workers.25,000 workers.• For 30 cents an hour.For 30 cents an hour.

• Is that good or bad?Is that good or bad?

• By hand.By hand.

Then to the port town of Then to the port town of Shenzhen to be exportedShenzhen to be exported

Shenzhen, ChinaShenzhen, China

……to Long Beach, California.to Long Beach, California.

…with Oil from the Middle East.

……to your local shoe outlet.to your local shoe outlet.

Interconnected. Interdependent.Interconnected. Interdependent.

• Shoes are produced mostly by women in China Shoes are produced mostly by women in China (and many other countries: 1/3 of all Nike’s are (and many other countries: 1/3 of all Nike’s are made in China) for ~30 cents an hour.made in China) for ~30 cents an hour.

• Materials (mostly from oil) cost about $2 per Materials (mostly from oil) cost about $2 per pair of shoes.pair of shoes.

• Shoes are shipped out of China (using oil from Shoes are shipped out of China (using oil from elsewhere) mostly to the USA and Europe.elsewhere) mostly to the USA and Europe.

• Shoes are delivered to a store near you and Shoes are delivered to a store near you and sold to you for $75…or more!sold to you for $75…or more!

• Without you: They won’t make shoes.Without you: They won’t make shoes.

• Without them: There are no shoes to buy.Without them: There are no shoes to buy.

http://business.nmsu.edu/~dboje/nike/nikewithmap.html

THE THE BIGBIG QUESTION: QUESTION:

Is Globalization:Is Globalization:A. Good?A. Good?

B. Bad?B. Bad?

C. All of the above?C. All of the above?

D. None of the above?D. None of the above?

Stay Tuned…Stay Tuned…

Current World DivisionsCurrent World Divisions

……for example, by economics.for example, by economics.• CORECORE• PERIPHERY PERIPHERY • SEMI-PERIPHERYSEMI-PERIPHERY

COUNTRYCOUNTRY GDPGDP GDP pcGDP pcUSA $14,660,000,000,000 $47,200China $10,090,000,000,000 $ 7,600India $ 4,060,000,000,000 $ 3,500Germany $ 2,940,000,000,000 $35,700Russia $ 2,223,000,000,000 $15,900Brazil $ 2,172,000,000,000 $10,800South Korea $ 1,459,000,000,000 $30,000Nigeria $ 377,900,000,000 $ 2,500Singapore $ 291,900,000,000 $62,100Cameroon $ 44,330,000,000 $ 2,300Luxemburg $ 41,090,000,000 $82,600Haiti $ 11,480,000,000 $ 1,200

According to the CIA FactbookAccording to the CIA Factbook

USA $14,660,000,000,000$47,200

India $ 4,060,000,000,000 $ 3,500

Germany $ 2,940,000,000,000$35,700

Russia $ 2,223,000,000,000 $15,900Brazil $ 2,172,000,000,000

$10,800South Korea $ 1,459,000,000,000 $30,000Nigeria $ 377,900,000,000 $ 2,500Singapore $ 291,900,000,000

$62,100Cameroon $ 44,330,000,000 $

2,300Luxemburg $ 41,090,000,000

$82,600Haiti $ 11,480,000,000 $

1,200

Measuring IncomeMeasuring Income• Gross Domestic Product (GDP)Gross Domestic Product (GDP)

o Total value of all materials, goods, and services Total value of all materials, goods, and services produced in one yearproduced in one year

o Does not include in/outflows of money: Does not include in/outflows of money: remittancesremittanceso Impacted by: Impacted by:

relative buying power: relative buying power: PPP-Purchasing Power ParityPPP-Purchasing Power Parity-- Based on Based on hours of labor hours of labor required to purchase required to purchase a gooda good

Exchange Rate vs. Buying PowerExchange Rate vs. Buying Power-- Euro vs. dollar vs. bahtEuro vs. dollar vs. baht

• ““Per capita”Per capita”– Used for equalizing comparisons between dissimilar Used for equalizing comparisons between dissimilar

populations (divide GDP by population)populations (divide GDP by population)– ““GDP per capita” vs. “GDP”GDP per capita” vs. “GDP”

““Big Mac Index”Big Mac Index”Four most expensive

Iceland - USD 7.45 Norway - USD 6.63 Finland - USD 6.11 Sweden - USD 5.33

Four most affordableIndia - USD 1.40 China - USD 1.41

Hong Kong - USD 1.54 Malaysia - USD 1.57

Ten fastest earnedTokyo - 10 minutes

Los Angeles - 11 minChicago - 12 min Miami - 12 min

New York City - 13 min Auckland, NZ- 14 min Sydney, OZ - 14 min

Toronto - 14 min Zürich, Switz - 15 min

Dublin, Ireland - 15 min

Ten slowest earnedBogotá, Col. - 97 minutes Nairobi, Kenya - 91 min Jakarta, Indo. - 86 min

Lima, Peru - 86 min Caracas, Ven.- 85 min Mexico City - 82 min Manila, Phil - 81 min

Mumbai, India - 70 min Sofia, Bulgaria - 69 min

Bucharest, Rom. - 69 min

“PPP”

The CoreThe Core• Industrialized capitalist

countries, led by former colonial powers (MDC’s)

• So-called “1st World” or “Developed World”

• Centers of trade, technology, productivity, $$$, high GDP pc

• Exploit the Periphery and Semi-periphery

• Examples: Western Europe, North America, Japan, Australia

The PeripheryThe Periphery• Poor, ex-colonial nationsPoor, ex-colonial nations• So-called So-called ““Third WorldThird World” ” or or

“Developing Countries” (LDC’s)“Developing Countries” (LDC’s)• Exploited countries and regionsExploited countries and regions

– ex·ploi·ta·tion  ex·ploi·ta·tion   (ek sploi-tay shun):  (ek sploi-tay shun): • The act of employing to the greatest The act of employing to the greatest

possible advantage: possible advantage: exploitation of copper deposits.exploitation of copper deposits.

• Utilization of another person or group Utilization of another person or group for selfish purposes: for selfish purposes: exploitation of unwary consumers.exploitation of unwary consumers.

• Exploited by Core and Exploited by Core and Semi-PeripherySemi-Periphery

• Tend to export resources and Tend to export resources and provide labor; provide labor; low GDP pclow GDP pc

• Examples: Kenya, Bolivia, Examples: Kenya, Bolivia, Pakistan, etc.Pakistan, etc.

The Semi-PeripheryThe Semi-Periphery• Somewhere in-between core and periphery

• Industrializinging ex-colonial countries (NICs)

• Countries or regions with mixed processes:– Both exploited and exploiters.– Both exporters and importers of goods.

• Examples: South Africa, Brazil, Mexico, South Africa, Brazil, Mexico, Taiwan, South Korea.Taiwan, South Korea. What about…?

……CHINA?CHINA?

CHINACHINA• Historically considered as “periphery”Historically considered as “periphery”• But never colonizedBut never colonized• With trade opening up to China over past With trade opening up to China over past

20 years, China has emerged into the 20 years, China has emerged into the “Semi-Periphery”“Semi-Periphery”

• Recent impact on international markets Recent impact on international markets and HUGE demand (i.e. oil, metals, etc.)and HUGE demand (i.e. oil, metals, etc.)

• Huge population will affect globalizationHuge population will affect globalization

Q: Will China be considered a “Core” Q: Will China be considered a “Core” player in the not-too-distant future?player in the not-too-distant future?

Gross Domestic Product (GDP)Gross Domestic Product (GDP)(20102010, , 19951995 estimates)2010 %2010 %

RankRank CountryCountry GDP GDP GrowthGrowth

1 E.U. $14,520,000,000,000 -4.0%-4.0%

$ 9,829,449.300,000$ 9,829,449.300,000

2 U.S. $14,250,000,000,000 -2.4%-2.4%

$ 7,338,400,000,000$ 7,338,400,000,000

3 China $ 8,767,000,000,000 8.4%8.4%$ 700,277,800,000$ 700,277,800,000

4 Japan $ 4,141,000,000,000 -5.7%-5.7%

5 India $ 3,548,000,000,000 6.1%6.1%

http://www.todayonline.com/World/China/EDC120917-0000021/7,8-growth-forecast-for-China-this-year

Which of these statements Which of these statements do you think is true?do you think is true?

• Because of globalization, the rich Because of globalization, the rich have become richer, yet the poor have become richer, yet the poor have also become richer.have also become richer.

• Because of globalization the “gap” Because of globalization the “gap” between rich and poor has widened.between rich and poor has widened.

““Gap” between Rich and PoorGap” between Rich and Poor

http://www.theonion.com/articles/gap-between-rich-and-poor-named-8th-wonder-of-the,18914/

Brief History of “Globalization”Brief History of “Globalization”

In my 1995 Human

Geography textbook, the

word “globalization” was not in the

glossary, index, or text.

The Silk RoadThe Silk Road(evidence dates back to 1600 BC, lasted (evidence dates back to 1600 BC, lasted

through Mongol Empire ~1400)through Mongol Empire ~1400)

The Early Days of GlobalizationThe Early Days of Globalization

“Western” World-System (Globalization) History

• Nile Valley, Mesopotamia• Greeks, Romans• European Colonialism / Slave Trade:

1400s-1800s • Industrial Revolution: Wage Labor

1800s/ early 1900s• World War II / Cold War / Decolonization:

mid-1900s• Neocolonialism / Multinational Corporations:

Late 1900s

However! Keep in mind…However! Keep in mind…• China

• Native civilizations: Inca, Maya, Aztecs

• India

• Assyrians

• Persians

• Mongols

• Ottomans

• And others!

• All engaged in some form of globalization(a.k.a. trade)

1400s: European Colonialism1400s: European Colonialism• Christopher

Columbus: Where was he Where was he going? Why?going? Why?

• $$$$$$• ChurchChurch• Food and Food and

Labor = Labor = Spices and Spices and SlaverySlavery

Hegemony Hegemony • Domination over a Domination over a

region or the worldregion or the world

• ColonialismColonialism

• Not just political or Not just political or military controlmilitary control

• Most pervasive is Most pervasive is economic and economic and cultural controlcultural control

• TheThe “Golden Rule”“Golden Rule”

ColonialismColonialism

Geographic ImplicationsGeographic Implications• Imperialism and Imperialism and

Colonialism Colonialism

• Ethnocentrism Ethnocentrism and Racismand Racism

• Environmental Environmental DeterminismDeterminism

1800-19001800-1900

Imperialism:Imperialism:FormalFormal Colonialism

• Colonies under direct governance and control

• Core controls labor, resources, land

• Often indirect political rule through local leaders

IndustrialIndustrialRevolutionRevolution

• Early-1800sEarly-1800s– Britain (Hearth): (Hearth): from slave cotton– Textiles, steam power, iron, canals

• Mid-1800sMid-1800s– Diffusion to Germany, France,

Belgium, Netherlands– Steel used for railroads, steamships,

telegraph (means of globalization)

• Late-1800s/ early-1900sLate-1800s/ early-1900s– Spread to Europe, US, Japan– Electricity, oil, engines, roads, radio

Ethnocentrism and RacismEthnocentrism and Racism• “Our way is best”

• “Civilizing”– Natives– Non-whites

Environmental DeterminismEnvironmental Determinism• The belief that certain physical

environments (climates) are more inclined to produce advanced civilizations than others– Torrid (tropics)– Temperate (mid-latitudes)*Temperate (mid-latitudes)*

• ““Mediterranean”=“Middle of the Earth”Mediterranean”=“Middle of the Earth”

– Frigid (polar regions)

* Theorized that this region was most likely to produce advanced civilization

Environmental Determinism:Environmental Determinism:ExampleExample

Q: Q: Is it true Is it true that tropical that tropical climates climates causecause

laziness and laziness and promiscuity? promiscuity?

Birth Rate Income PCBirth Rate Income PCTropicsTropicsLiberiaLiberia 42.2542.25 $ 500$ 500AfghanistanAfghanistan 38.3738.37 $ 800$ 800HaitiHaiti 29.1029.10 $ 1,300$ 1,300BurundiBurundi 41.7641.76 $ 300$ 300

Mid-LatitudesMid-LatitudesBelgiumBelgium 10.1510.15 $36,600$36,600JapanJapan 7.64 7.64 $32,600$32,600AustraliaAustralia 12.4712.47 $38,500$38,500United StatesUnited States 13.8313.83 $46,400$46,400

CIA World Factbook: Estimates for 2009CIA World Factbook: Estimates for 2009

Is it true?Is it true?• The stats are accurate.

• Must be true then?

• If so, then do we, based on the statistics, have a right to conquer (colonize)(colonize) these lazy, promiscuous people to show them how to live more civilized?

• Let’s ask the Nazis, the Spanish, the English.

• Maybe there are some other factors that help explain the statistics…

Or the Yanks?Or the Yanks?

1900:1900:Rise of MultinationalRise of MultinationalCorporations (MNCs)Corporations (MNCs)(Transnational-TNCs)(Transnational-TNCs)• Investments, activities

transcend borders

• Cheap labor / resources in Periphery / S-P countries supply core

• Int’l business and government become increasingly linked

Cartoon on Standard Oil, Cartoon on Standard Oil, 19041904

• Industrial revolution helped create the rise of MNCs

• “Golden Rule” in full effect

• Rules made by core in interest of business

Examples of MNC’sExamples of MNC’s• Standard OilStandard Oil

• NokiaNokia

• StarbucksStarbucks

• Coca-ColaCoca-Cola

• Ford Motor CompanyFord Motor Company

• McDonaldsMcDonalds

• MicrosoftMicrosoft

• ChiquitaChiquita

Oldest MNC: Dutch East India Trading Co.:• Indonesia, SE AsiaIndonesia, SE Asia• Later began the Dutch Later began the Dutch

West India Company:West India Company:• Traded in Caribbean, Traded in Caribbean,

AmericasAmericas (1621)

(1602)

““Modern”Modern”ImperialismImperialism

(Frequently (Frequently viewed as viewed as

Post-WWII)Post-WWII)

1945: World War II1945: World War II “Begins” contemporarycontemporary globalization

• Sudden shifts in economic hegemony, political power

• Sudden technological innovations

• Sudden growth of transportation, communications networks

Late 1940s: Late 1940s: U.S. dominantU.S. dominant• Sole possession of

atomic bomb to 1949

• War destroyed industries of Europe, Russia and Japan

• U.S. finances reconstruction

Nagasaki

Frankfurt

Neo-Imperialism Neo-Imperialism (Informal(Informal Colonialism): Colonialism): Spheres of InfluenceSpheres of Influence

• Post-WWII (today!)Post-WWII (today!)• Core-dominatedCore-dominated• NOT militarily controlledNOT militarily controlled• ““Controlled” through trade and resources Controlled” through trade and resources ($)($)• Dependency TheoryDependency Theory

Dependency TheoryDependency Theory• Low development in the periphery is a Low development in the periphery is a

cause of their reliance / dependence cause of their reliance / dependence upon core countriesupon core countries

• But who decides dependency?– Core or Periphery?

• Is the Core better or worse off because of it?– Power Struggles: Food / Military Aid– Foreign Investment / Loans by Core– Imports / Exports – Price “control”– International issues?

Anti-Anti-colonial colonial revoltsrevolts

• Colonial flags come down– Asia, 1940s-1950s, Africa 1960s-1970s

• ““Neocolonialism” Neocolonialism” begins– Periphery countries “free,” but…– Ex-colonial powers still dominate

economies, resources, cultures, etc.

World divisions: World divisions: Late 20th centuryLate 20th century• First World (“Global North”)First World (“Global North”) - Industrialized Industrialized

capitalist countries of Western Europe, North America.capitalist countries of Western Europe, North America.

• Second World Second World - Centrally-planned “socialist” - Centrally-planned “socialist” countries such as former Soviet Union.countries such as former Soviet Union.

• Third World (“Global South”) - Ex-colonies: India, Malaysia, Brazil, Algeria, etc.

• Fourth World (“Global South”) - Poorest nations including indigenous communities

North / South DivideNorth / South Divide

The World Bank estimates more than 1.4 billion people (1/5 world population) live in acute poverty of < $1

(U.S.) per day.70% women and children

““Global North vs. Global South”Global North vs. Global South”

Regions of the Regions of the “World Village”“World Village”

EastAsiansSouthAsiansAfricans

European

LatinAmer.NorthAmer.Oceania

• 333 East Asians333 East Asians

• 274 South Asians274 South Asians

• 132 Africans132 Africans

• 120 Europeans 120 Europeans

• 86 Latin Americans 86 Latin Americans

• 50 North Americans50 North Americans

• 5 from Oceania5 from Oceania

In a world village of 1,000 people:

Household incomeHousehold income

Less than$650$650-$35,000Over$35,000

• Average annual Average annual income $4,890income $4,890

• 600 poor600 poor

• 300 marginal300 marginal

• 100 well-off100 well-off

Ownership / ConsumptionOwnership / Consumption

200richest800others

• 200 richest 200 richest villagers own villagers own and consumeand consume

80% of goods80% of goods

• Other villagers Other villagers own and own and consume consume remaining 20%remaining 20%

““80 / 20 Rule”80 / 20 Rule”

• ““Fast” (20%) Fast” (20%) have access to telecommunications, consumer goods, arts & entertainment.

• ““Slow” (80%) Slow” (80%) have limited access—resentment toward the 20% with the technology.

• 20% of population owns 74% of all phone lines in the world.

• 80% of all websites are in North America.

http://news.bbc.co.uk/2/hi/technology/8552410.stm

““The Digital Divide” The Digital Divide” ““Fast” vs “Slow” worldsFast” vs “Slow” worlds

So what will continue to drive So what will continue to drive globalization?globalization?

Globalization of the Future?Globalization of the Future?• Industrial growth of Asia and EuropeIndustrial growth of Asia and Europe• Continued low wages in peripheryContinued low wages in periphery• ““Cheap” OilCheap” Oil• More Economic InternationalizationMore Economic Internationalization

– Free trade agreements, international trade

• New Global MarketsNew Global Markets– New global technologies (Internet, cell phones, etc.)– On-line trading / commerce– Worldwide marketing (via satellite, Internet)

• Desire!

It’s here to stay.It’s here to stay.Globalization…Globalization…